EU Lawmakers Add Spotify and iTunes to Ban on Geo-Blocking

Do you know how Amazon tacks on surcharges in the Kindle Store for certain countries but not others?

That practice is going to end soon - in the European Union, at least.

European Union lawmakers voted on Tuesday to ban online retailers from treating consumers differently depending on where they live and expanded their proposed law to include music streaming services such as Spotify and Apple's iTunes.

Ending so-called geoblocking is a priority for the European Commission as it tries to create a single market for digital services across the 28-nation bloc, but many industries argue that they tailor their prices to specific domestic markets.

Tuesday's vote means the European Parliament can begin final negotiations with EU member states to reach a deal on the proposal, after which it would become law.

The proposal, which will apply to e-commerce websites such as Amazon, Zalando and eBay, as well as for services provided in a specific location like car rental, forbids online retailers from automatically re-routing customers to their domestic website without their consent.

Amazon already makes it retail websites accessible to customers anywhere in Europe and says 98 percent of its own stock is available to shoppers from any European country.

In a blow for the book publishing and music industries, European Parliament members voted to include copyright-protected content such as music, games, software and e-books in the law.

That would mean music streaming services such as Spotify and iTunes would not be able to prevent, for example, a French customer buying a cheaper subscription in Croatia, if they have the required rights.

The music industry has argued that extending the geoblocking ban to copyright-protected content could lead to a waterbed effect - pushing up prices in areas that are cheaper now.

However, EU member states favor excluding copyright-protected services from the geoblocking ban.

"Booksellers can't be forced to sell across borders. It is a company choice, in line with the evolution of the market, and booksellers' first concern is to keep their business afloat," said Fabian Paagman and Luc Treutenaere, co-Presidents of the European and International Booksellers Federation.

Under the proposal, consumers would be able to buy goods online even when the retailer does not deliver to their country of residence. Retailers would not be forced to deliver cross-border though, so an Italian buying a TV off a German website would have to arrange their own delivery or collect it.

Consumers will also be able to take advantage of better prices for car rentals, hotel rooms or music festivals on websites in other countries, which may have previously re-routed them to their local version.

"What we want is simple: to end discrimination in the single market, based on people's nationality, residence or temporary location," said Roza Thun, the MEP who is steering the legislation through the European Parliament.

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Mike Hall26 April, 2017

Presumably the VAT rates will still vary with the buyers location so we are talking about prices excluding VAT, but how will the laws that prevent discounting of book prices in some countries interact with the proposed rules? Can it work unless a company across the border is effectively exempt from the rules allowing price fixing?